We started the RÄ"Co Market Intelligence Reports with two goals in mind: To highlight the importance of the specialty retailer to drive and influence the sales process; and to uncover information about the major drivers of the market at retail.

Given the dramatic market share shifts we've seen to home centers and hard surface stores, and the resulting lowering of margins and commoditization of several product categories, perhaps it's time once again to talk about the critical role specialty retailers continue to play in today's market and in the future of the floor covering industry.

Prior to RÄ"Co, we had a bunch of often conflicting anecdotal information that differed from manufacturer to manufacturer. Most often, manufacturers overstated the importance of their own brands and underestimated the retailer's relationship as a trusted advisor to the consumer. One company told me about its brand having more influence in the consumer's mind than even the retail salesperson selling the product — but then I found out the survey sample was only 12. In other words, it was meaningless.

I realized we needed to set the record straight. And so RÄ"Co was born.

One of the first questions we wanted answers to was about influence — how important were brands and were they more important than salespeople in the eyes of the consumer?

Most of you already know the answer to that question: The retail salesperson is the single most influential factor when making a sale.

But there's more. In fact, specialty retail salespeople are wielding that influence every day. We asked how often they switched consumers away from a stated brand preference. One year in laminate, 46 percent of respondents said they often or very often did so. As you can tell, the implications are profound. I've often cited Pergo — which at one time was the runaway market leader — as an example that a brand name will only take you so far. We saw that while consumers often came in asking for Pergo by brand, they were increasingly being steered away to other laminate brands instead.

Another important RÄ"Co finding is about share of the market, whether by channel or by product. We've seen the builder market grow and then collapse. We've seen carpet slowly but consistently lose share. Meanwhile, vinyl has lost then gained share as its value proposition seemed to align itself with the times. You'll see in the charts below just how dramatic some of those changes have been.

There's another part to RÄ"Co, that's where respondents get to measure their top suppliers across several key attributes. That ranking may be a reflection of retail perceptions, but the consistency we have seen across the years makes me think it's more about actual performance than anything else. As such, it has become a valuable tool for both manufacturers and their retail customers, although that information is difficult to present in a retrospective like this.

However, the most important finding uncovered in this area is how much of any given product category's sales go to the top supplier. In most cases it's near or above 50 percent across all categories. That prompted one retail executive to say, "If you're not number one, you might as well be number five.bCrLf

RÄ"Co has evolved throughout the years as we started to refine and, in some cases, redefine the questions we thought were important. That will continue in response to changes in market dynamics.

This year, 2012, we hit upon an incentive formula that increased RÄ"Co participation dramatically and we feel that the RÄ"Co Market Intelligence Report is even more valuable today than it was 10 years ago when we started this project.